BILL ANALYSIS Ó
SB 771
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Date of Hearing: July 5, 2011
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
SB 771 (Kehoe) - As Amended: June 30, 2011
SENATE VOTE : 29-8
SUBJECT : Energy: California Alternative Energy and Advanced
Transportation Financing Authority
SUMMARY : Revises the definition of "renewable energy" and
would additionally define "ultralow-emission" energy to include
energy generation based on natural gas turbines, landfill gas
turbines, digester gas turbines, microturbines, natural gas
engines, landfill gas engines, digester gas engines, and fuel
cells that the California Alternative Energy and Advanced
Transportation Financing Authority, in consultation with the
State Air Resources Board, determines to meet specified
requirements.
EXISTING LAW :
1)Creates CAEAFTA for the purpose of promoting the development
and utilization of alternative energy sources and the
development and commercialization of advanced transportation
technologies. CAEAFTA consists of five members: the Director
of Finance, the chairperson on the California Energy
Commission (CEC), the president of the California Public
Utilities Commission (PUC), the Controller, and the Treasurer,
who serves as the chairperson of CAEAFTA.
2)Permits CAEATFA to provide bond financing to lend assistance
to a participating party to enter into loan agreements to
finance projects that use an alternative energy source or
advanced transportation technologies.
3)Permits CAEATFA to approve a sales and use tax exemption on
tangible personal property utilized for the design,
manufacture, production, or assembly of advanced
transportation technologies or alternative energy source
products, components or system. This sales and use tax
exemption will sunset on January 1, 2021.
4)Requires CAEATFA to establish a renewable energy program to
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provide financial assistance to public power entities,
independent generators, utilities, or business manufacturing
components or systems, or both, to generate new and renewable
energy sources, develop clean and efficient distributed
generation, and demonstrate the economic feasibility of new
technologies, such as solar, photovoltaic, wind, and
ultralow-emission equipment.
5)Defines "renewable energy" as either of the following:
a) A device or technology that conserves or produces
heat, processes heat, space heating, water heating,
steam, space cooling, refrigeration, mechanical energy,
electricity, or energy in any form convertible to these
uses, that does not expend or use conventional energy
fuels (e.g. oil, gasoline, natural gas), and that uses
biomass, solar thermal, photovoltaic, wind, or geothermal
electrical generation technologies.
b) Ultralow-emission equipment for energy generation
based on thermal energy systems such as natural gas
turbines and fuel cells.
FISCAL EFFECT : Unknown.
COMMENTS : According to the author, updating the CAEATFA
program to be more inclusive of technologies that are ultralow
emission equipment and that can utilize renewable energy
resources is important to achieving the State's greenhouse gas
reduction goals.
1)Background : CAEATFA was created in 1980 with an authorization
of $200 million in
revenue bonds to finance projects utilizing alternative sources
of energy, such as cogeneration, wind and geothermal power. In
1994 its charge was expanded to include the financing of
"advanced transportation" technologies. During the energy
crisis of 2001, its authority was again expanded, this time to
provide financial assistance to public power entities,
independent generators, and others for new and renewable energy
sources, and to develop clean distributed generation. CAEATFA
consists of five members: the Director of Finance, the Chair of
the CEC, the President of the California Public Utilities
Commission (PUC), the Controller, and the Treasurer. Its
current mission is to provide financing for facilities that use
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alternative energy sources and technologies. CAEATFA also
provides financing for facilities needed to develop and
commercialize advanced transportation technologies that conserve
energy, reduce air pollution, and promote economic development
and jobs.
2)Why is this needed : California's air quality in many parts of
the state poses both a health risk
and increased greenhouse gas emissions. Landfilling is the main
method for disposal of municipal and household solid wastes or
refuses in the United States. Although maintained in an
oxygen-free environment and relatively dry conditions, landfill
waste produces significant amounts of landfill gas (mostly
methane). With Californians dumping more than 42 million tons
of waste per year, the total amount of landfill gases produced
in California is tremendous. According to the United States
Environmental Protection Agency, methane is over 20 times more
effective in trapping heat in the atmosphere than carbon
dioxide.
Technologies that can convert methane to electrical energy
without creating significant air pollutants have recently become
commercially available yet many of California's incentives for
emerging technologies do not qualify these recent equipment
types for eligibility.
CAEATFA currently includes ultralow-emission equipment for
energy generation based on thermal energy systems such as
natural gas turbines, and fuel cells that may qualify for
incentives. It does not include landfill gas turbines, digester
gas turbines, and microturbines to the list of qualifying
ultralow-emission equipment, thus creating the need for this
bill.
3)Latest amendments : This bill was heard in Natural Resources
Committee and the author
made the following amendments prior to this committee hearing:
1) remove natural gas turbines and engines from being deemed
"renewable generation" but keeps them eligible for the program,
and 2) create a definition for "ultralow emission equipment"
pursuant to Health and Safety Code 41514.9.
REGISTERED SUPPORT / OPPOSITION :
Support
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Bill Lockyer, Treasurer, State of California (as amended)
Clean Power Campaign (sponsor)
Regional Council of Rural Counties (RCRC)
Opposition
None of file.
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083